Weekly Review and Outlook: EUR/USD Heading to 2008 Low, More Downside Ahead

[Forex-Outlook]

Euro got brief support from EU/ECB's announcement last week but selling quickly re-emerged to send Euro sharply lower against dollar as well as commodity currencies. EUR/USD dropped to as low as 1.2352, just inch above 2008 low of 1.2329. EUR/CAD dropped to lowest level since 2001 while EUR/AUD dropped to new record low. While the default risk of Greece temporarily eased, there are still a number of concerns on developments in Eurozone. Such concerns triggered selloff in risky assets towards the end of the week where we saw stocks pared much of earlier gains while crude oil dropped sharply to as low as 70.83. Dollar and gold managed to benefit from the risk averse sentiments with dollar index jumped to as high as 86.28 while gold made record high of 1249.7.

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